Chapter 11: Societal, Ethics, CSR Flashcards
Define Ethics and Business Ethics and Unethical behaviour
R.T. De George: Ethics is the study of morality or moral judgments standards, and rules of conduct
P.V. Lewis: Business ethics is considered as comprising the rules, standards, principles, or codes that constitute guidelines for morally right behaviour in certain contexts
Unethical behaviour: as behaviour that some way has harmful effect on others and is “either illegal, or morally unacceptable to the larger community”
What two central models that describe the basis of judging ethics of organizational decisions?
- Utilitarian, or end-pint ethics
- Rule ethics
Define End-Point Ethics/Utilitarian and it’s limitations
(focused on end result for everything involved)
End-Point Ethics/Utilitarian: asserts that to determine whether an action is right or wrong, one must asses the likely consequences, including tangible economic outcomes (profit for shareholders) or intangible outcomes such as happiness
* Goal: produces the greatest amount of good for the greatest amount of people
* Maximizing the utility/usefulness for all stakeholders
Limitations:
* The difficulty in estimating or measuring relative benefits and costs to all stakeholders affected.
* The “process” or means to achieve the results is ignored.
Define Rule Ethics and it’s limitations
(doesn’t consider outcomes and focuses on the rules)
Rule Ethics: * Rules and principles that guide behaviour;
Religious beliefs, family values, cultural values etc on what is morally right versus wrong
* Individuals should do what is required by ethical principles and should not do anything to violate those principles
Limitations
* Cannot be applied universally.
* Everyone has a different perspective.
* Obligations may override ethics.
* Rules may not be applied consistently to our professional versus personal lives.
What organizational factors affect us in our ethical or unethical behaviour?
(5 key points)
Corporate Culture, Decoupling, Job Routinization, Organizational Identity, Work Roles
Corporate Culture: Define Organizational Culture, Codes of Conduct, Socialization ethics, Democratic culture, and Authoritative culture
Organization culture: the bond or glue that hold an organization together
* Encompasses shared beliefs regarding how members should behave and what goals they should seek
* Organizational culture provides an organizational reality which ethical actions are discussed, judged, and legitimized
What’s the Connection to Ethics?
Socialization of ethics: occurs through the process of internalization of organizational ethical standards, fundamental to the codes of conduct, and public discussions of ethical issues through formal meetings
* When employees convey the organization’s and norms effectively
**Corporate Codes of Conduct **
* Used by the business community to improve ethical conduct
Bureaucratic Culture
Democratic culture: may encourage members to take responsibility for their actions
Authoritative culture: may dictate rules that replace individual discretion (trying to hide mistakes)
What’s wrong with Decoupling?
suggests that organizations can conduct themselves in ways that hide activities that would otherwise be considered unacceptable if they were subjected to closer scrutiny.
suggests that employees will be encouraged to engage in unethical behaviour where that behaviour has been legitimized as accepted business practice and where behaviour and evaluation of that behaviour are decoupled.
Ex. Corporate spying vs Market research
What’s the problem with Job Rountinization? What is Habitual routines?
Job Rountinization: The everyday patterns of work can create blind spots when it comes to identifying the ethical implications of our actions
Habitual routines: standards and commonly accepted methods for performing work
* Behavioural norms that evolve in groups, pressure individuals to adhere to habitual routines
What’s Social Indentity Theory? What’s wrong with Organizational Identity?
-
Social Identity Theory: that individuals classify themselves and others into social categories (organizational membership, age, gender, etc.) that are defined by the typical characteristics abstracted from the members
○ The ethics of an individual employee may be tied to the ethics of the organization they identify with
When we identify with our organizations, we tend to become less critical of its policies and behaviour.
Define Organizational role theory, What’s wrong with Organizational Roles?
Organizational role theory: purposes that individuals in organizations occupy positions that involves a set of activities, including interaction with others, that are required as part of the job
*Role Conflict *
* Ex. Salesperson who must decide the role responsibility of reach a sales target should take priority over his role of being an honest citizen?
Define Corporate Social Responsibility (CSR)
Corporate Social Responsibility (CSR): obligations or responsibilities of an organization that involve going beyond production of goods/services at a profit and the requirements of competition, legal regulations, or customs
* To create policies and engage in actions that are desirable in terms of society’s values
* Ex. Donation to a cause
What are the four levels of CSR?
(Responsibilites)
Economic (ensures profitability),
Legal (ensure transactions are compliant to law),
Ethical (engage in fair and just business practices),
Philanthropic (engage in voluntary activities that aim to benefit the community)
What are the key agruments aganist CSR
5 points
Business is Business:
* Milton Friedman argued for this, primary purpose of business is profit maximization and no other purpose
Business Plays by its Own Rules
* Business can’t be judged by the same set of rules and standards of moral conduct we apply outside of business
* Should we expect business owners to apply the same ethical standards we might apply in our personal lives?
Business should not dictate Morality
* Managers should not dictate social policy, leave that to the government to decide
Organizations cannot be held Accountable
* Who is exactly to be held accountable for the actions taken by individuals on the behalf of their company? Can’t figure out who is to blame
High Costs are Passed to the Customer
* Additional costs of CSR may limit a company’s national competitiveness, would increase firm costs and raise the price of goods onto customers
What are the arguments for CSR
5 points
Conform to Societal Expectations
* Businesses are created to serve public needs… so there may be an obligation to not violate social beliefs
Adopt CSR as a Practical Business Strategy
* To avoid public criticism that more encourage more government involvement
Acknowledge Membership in a Broader Network of Stakeholders
* Businesses should consider it’s impact on stakeholders
* They may withdraw participation if you don’t capture their interests
Gain Long-Term Benefits from CSR
* Will continue to receive acceptance and considered legitimate form the public
Business has the Power and Resources to do Good
* Companies have the power and resources to make the world a better place through their talented workforce and financial resources while still making a profit
What are the three key factors influencing corporations to follow CSR?
social media, corporate disclosure legislation and CSR Rankings
